Requirements:

Become a bona fide resident of Puerto Rico

Buy property within 2 years

Open a bank account in PR

Donate $5,000 annually to a non-profit in Puerto Rico

How is this possible?

Puerto Rico’s unique status as one of five U.S. territories (‘possession’ in the IRS code) allows it to offer unique tax incentives. Without getting into the questions about whether Puerto Rico should be a territory (or a state or independent), it’s worthwhile to understand the implications of its status.

As residents of a territory of the U.S., Puerto Ricans are American citizens but do not have the right to vote in federal elections and do not have congressional representation. And since there can be no taxation without representation, Puerto Rico does not pay federal taxes. Instead, Puerto Rico has its own tax code and the IRS has special rules that apply to Puerto Rico.

Within this framework, Puerto Rico is able to make its own taxation laws for bona fide residents and companies operating from Puerto Rico. The government of Puerto Rico has taken this opportunity to create the Act 20 and 22 tax incentives, among other tax incentives and economic development initiatives.

How can I benefit from this?

The possibility of paying less tax appeals to everyone but the tax incentives were created to spur economic development so it’s not simply a matter of visiting the island and paying less in taxes. You need to meet the requirements established in the laws for Act 20 & 22 as well as the IRS regulations for moving to Puerto Rico.

One of the key factors for both Act 20 and 22 is residency. The easiest approach is to become a bona fide resident, living on the island for the majority of the year and earning your income in Puerto Rico. However, there’s flexibility in this depending on whether you’re Act 22, Act 20, or both and you’ll want to work with a trustworthy tax consultant on the specific details and structure that’s right for you.

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We are here to answer all your questions. We can help you. Complete the following contact form and a representative of Blueprint Real Estate will contact you.

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Terms and Conditions: Certain restrictions may apply. The information for each property is subject to verification and/or correction; we reserve all rights to remove any property at any time. Only written offers will be considered and submitted, all offers are subject to approval of the property owners.